2020 — annus horribilis — was set to herald the beginning of a new era for the Kingdom of Saudi Arabia, with its issuing of tourist visa and the opening of its borders to leisure travel. The pandemic may have dramatically changed the course of the year, but the long term strategy to diversify Saudi Arabia’s economy has not changed and the Gulf giant remains an interesting place for tourists and those interested in investing in the tourism sector alike.

 

Saudi Arabia’s goals are ambitious: 100 million annual visitors by 2030 (on par with France and six times that of the United Arab Emirates), new investments worth some $58 billion (USD) by 2023, and $133 billion (USD) by 2030. A large percentage of these investments are expected to come from outside Saudi Arabia. ‘Our target is indeed ambitious,’ Ahmed Al-Khateeb — Saudi Arabia’s Minister for Tourism — told Arab News…‘however, we have everything we need to achieve our target. We have a large country, diverse nature, a strong culture and great people, and therefore we have everything to get to the target we announced,’ he insisted.

 

More than one third of the 1.5 billion tourists who travelled the planet in 2019 were looking for ‘sun, sea and sand,’ elements in which Saudi Arabia is tremendously rich. The planned high-tech city of Neom, on the Red Sea, proximate to the borders with Jordan and the Israeli city of Eilat, together with the rest of Saudi’s western coast up to Jeddah — where the most of the Saudi historical heritage is concentrated — can become a world class destination. High-end, elite tourism is one of the fastest growing segments of the international travel business and Saudi Arabia hopes to capitalise on this trend. The government is committed to amend regulations and legislation to attract investors and visitors. Hotel licenses are already issued within 10 days and more relaxed standards of dress would be allowed on private resorts and beaches, though not yet on public facilities. Developing local tourism services and expertise is a major target of the Saudi Commission for Tourism and National Heritage and the entire government.

 

The internal and regional market also provides important opportunities. Saudis have traditionally been serious spenders on their foreign travels; effectively spending $22 billion (USD) in 2019. Trying to divert some of these travellers towards new domestic locations is part of the challenge. Luring visitors from the wider Gulf and Middle East region is also a priority, especially in absence of cultural barriers between guests and hosts.

 

Improving foreign direct investments (FDI) in the leisure sector is part of the wider Vision 2030 Agenda, which must also consider stereotypes to a country whose habits (including the alcohol ban and a relatively conservative mentality) can be seen as a disincentive for the establishment of mass tourism. Nonetheless, the economic stability of the country, its modern infrastructure and legal framework put Saudi Arabia in a privileged position compared to other possible competitors in Asia and Africa.

 

***

 

2021 will be a turning point for the entire global economy. The expected COVID-19 recovery will result in a massive change in the global equilibrium, with a huge amount of liquidity pumped by the central banks into the financial system. Countries able to intercept that finance will be winners of the next decade. Saudi Arabia is a credible candidate to be among them, with its diversification strategy and its ambition to become a major destination for world travellers.

​

​

04 January 2021

​